Debt and Economic Growth: The Case of Japan

This article empirically examines whether or not public debt has an effect on economic growth in Japan. Public debt is becoming a concern all over the world. It is no longer a problem of developing countries but is becoming a serious problem for developed countries as well. In Japan, large accumulation of debtis now receiving much attention. This article focuses on the Japanese case of the relationship between public debt and growth. The results show indicate a negative relationship between public debt and economic growth in Japan, as in many existing studies. Moreover, openness of the economy is not related to economic growth. Debt should be avoided or the quantity should be reduced in future. Reduction of dependence on exportsand efforts to cut the debt is necessary to expand Japan’seconomy.Keywords. Debt, Deficit, Economic growth.JEL. H30, H63

Monetary Policy and Stock/Foreign Exchange Market Liquidity: The Japanese Case

Abstract. This paper examines changes in liquidity of the stock market and foreign exchange market in response to monetary policy announcements of the Bank of Japan. In Japan, an unconventional monetary policy started from the year of 2001.This article reports on an empirical examination of the period from the beginning of the unconventional monetary policy to the present. Liquidity impairment in the foreign exchange market in Japan associated with announcements and conduct of monetary policy does not occur; however, such impairments normally do not occur. For the Japanese stock market, trade volume is associated with liquidity and the phenomenon occurs on the usual days. Market participants who obtain information about monetary policy are not subject to surprise and markets impairments do not happen as a result of the conduct of monetary policy in Japan. At least, these markets do not accept monetary policy conduct as a surprise.Keywords. Foreign exchange market, Liquidity, Monetary policy, Stock market.JEL. E52, E58, F31, G12

Is purchasing power parity hypothesis reasonable from the view of trade blocks and currency zones?

Since the 1980s, many regional agreements have appeared to facilitate trade and spur economic growth. This paper examines whether or not the purchasing power parity (PPP) hypothesis for regional agreements has been satisfied. This study employs a nonlinear unit root test for real exchange rates (RERs). Overall, the test results provide stronger support for PPP than any earlier studies of bilateral PPP for trade/currency integrated countries. When the data for the postintegration period are included, the evidence for PPP becomes more significant. Regional agreements have promoted the PPP hypothesis. KPSS tests provide more evidence for PPP than the ADF and PP tests for the RERs of European Union (EU) countries against the currency of Germany and the euro but not for the RERs against the US dollar. These results show that convergence toward PPP between the EU countries tends to be nonlinear but is likely to be linear for the non-EU and between EU and non-EU industrialized countries. Tracing back to the potential sources of nonlinearity in RERs proposed in existing literature, the RERs of the EU countries are supposed to be less affected by trade barriers and more by official interventions in the foreign exchange market after the introduction of the euro. Also, financial integration seems to have played a more significant role in recent years over the existence of trade barriers.peer-reviewe

Economic conditions, investment and employment in Europe

From 1999 the integrated currency ‘Euro’ has been introduced, however the doubt about introducing it has been discussed broadly. This paper presents an analysis on the European busines s cycle on the basis of the theory of optimum currency area, and analyses the problem of whether the movements of busines s cycle has shown convergence or not. The result is that the convergence has been ongoing recently. And this paper also considers of the reason of investment or employment that may be the big reason of promoting monetary integration. Some countries have realized increase of employment by exports and other countries have done it by domestic investment through appreciation of their own currencies. And on the whole, the process of increasing monetary integration in Europe, in other words, EMS (ERM) period, seems to have had a negative impact on employment.peer-reviewe

Has Adoption of Inflation Targeting Been Effective? Japanese Case

Inflation targeting has been adopted in many countries. The pros and cons of adopting this policy have been discussed in developing countries and in developed ones as the goal of this policy has been changing. For most developed economies, combating deflation has been a serious problem, so adopting inflation targeting for this overcoming deflation and recession is ongoing in many developed economies. This paper examines whether or not adoption of inflation targeting has been effective in Japan. Empirical results show that adoption of inflation targeting has promoted overcoming deflation, however, there are no clear results that other important macroeconomic variables have been related directly with this policy

Flipped Classroom: Effects on Education for the Case of Economics

The notion of the flipped classroom has been received much attention in the literature as it may increase learning outcomes and learning effectiveness elementary and secondary education as well as university learning. In the author’s class on international finance (economics) features a blended flipped classroom and lecture; questionnaires were used to collect learner data. Using principle component analysis, the effects of the flipped classroom are divided into two components: (1) challenge and growth and (2) understanding and quality. Also, it should be noted that the two components were not attained at the same time. A flipped classroom promotes education; however, it is difficult to attaining both components at the same time. To achieve a flipped classroom and active learning at one time seems an important but difficult task